KUALA LUMPUR -- Malaysia's biggest car distributor EON agreed on Monday on a new deal to sell Proton cars, the country's top-selling brand, in the local market, ending months of protracted talks.
Effective April 1, EON will relinquish its distributorship rights but instead will become a "super dealer" of Proton Edar, the distribution arm of Malaysia's leading car maker.
"This brings a win-win conclusion to the prolonged negotiations," an EON statement said.
EON, or Edaran Otomobil Nasional Bhd, said it envisaged buying not less than 100,000 Proton cars, comprising the entire range, from Proton Edar annually.
EON Managing Director Adzmi Abdul Wahab said that under the deal, the distributor's existing margins on the models it currently sells would be maintained.
"Margins for all other models and variants not sold by EON shall be mutually agreed, but EON as a super dealer shall be allowed a preferential margin from the other dealers," he said.
The accord also allows EON to sell non-Proton brands under separate entities and on separate premises.
EON said that as a super dealer, it would not be required to contribute to Proton's product development costs, a move that is likely to cheer its shareholders.
EON had strongly opposed Proton's earlier proposal to require both Proton Edar and EON -- the two Proton distributors -- to chip in 30 percent each to the cost of developing a new model.
Proton Edar and EON jointly hold 60 percent of the passenger car market in Malaysia, southeast Asia's largest auto market with new vehicle sales of 434,954 units last year.
EON has also begun selling Audi and Volkswagen cars from January.
EON's 32 percent parent, DRB-Hicom Bhd, is also involved in manufacturing, assembly and sale of other brands such as Honda and Mitsubishi cars in Malaysia.